To promote innovation and to encourage financial institutions to upgrade their working to the latest technology, the State Bank of Pakistan (SBP) has announced to launch an Innovation Challenge Facility (ICF). This facility will help to support advance tech solutions to encourage Digital Financial Services (DFS) in Pakistan. The facility will be operational in June 2019.
The aim of ICF is to allow people in the market to develop innovative solutions for customers and companies in Pakistan. This will in-turn help to increase access and usage of financial services within the present design of Asaan Mobile Account (AMA) scheme.
SBP says that this will encourage the establishment of client-based DFS system in the country, which would further encourage consumers to open Digital Transactions Accounts (DTA).
The ICF facility will be available to institutions including banks, microfinance institutions, government entities, and government departments/subsidiaries/boards, insurance companies, non-banking financial service providers, payment service operators, branchless banking players, telecoms, software houses, and startups. However, to become eligible for the grant organizations other than banks should have a partnership agreement with Banks.
The innovation facility is meant to expand the reach of financial services to far-flung areas in Pakistan which were previously ignored by the commercial banks. If this system gets implemented properly, it would also help to launch new ideas in the country having the potential to boost financial inclusion in Pakistan.
Moreover, it will also help to introduce these facilities to those segments of the population including factory workers, farmers, women, etc. which are usually ignored by the financial sector.